ARE YOU COVERED?
Home and contents insurance is absolutely vital if you live in or near a high-risk area and you don’t want to be liable for the full extent of any damage suffered by your home.
But choosing the right coverage is just as important as having insurance in the first place as there are lots of variables when it comes to what’s covered and what’s not.
“Home and contents insurance typically covers damage from natural disasters, including floods, fires, extreme storms, earthquakes, lightning, extreme ocean movements and impact (such as falling trees),” says Bessie Hassan, from insurance comparison website finder.com.au. “However, coverage is always within limits and you usually have to opt in to these options in order to make a claim.
“For example, a typical basic policy with fire cover may allow you to claim for resulting damage, however there are conditions. For example, the fire must not have been started by arson.”
Ramana James from NRMA Insurance says the main things you should consider when choosing a home insurance policy are: does the policy adequately cover you for the risks you face, and; is the sum insured the right amount to replace, repair or rebuild to get you back to where you were before the loss.
“Most insurers have calculators to help people decide the right amount of cover for their home and contents,” he says.
“Don’t forget rebuilding costs can also include costs of demolition and removal of the old structures, council fees and architect fees or meeting current building regulations etc.”
Ramana also says most policies are priced according to the risk a customer faces.
“If a customer lives in a high-risk area for flood or fire, they may pay more for their policies,” he says.
“Conversely if a customer is in a low-risk area, they will pay less.
“Some customers do have an option of removing flood cover to reduce their premiums, however if they are in a high-risk area, that may leave them exposed.”